THE NEUTRAL ZONE
Major League Soccer reduced its workforce by 20% Thursday, succumbing to the financial impact of the coronavirus. The organization eliminated just under 70 positions, including five job openings. MLS froze hiring in April weeks after suspending the season.
Commissioner Don Garber said he expects the league to lose $1 billion in revenue, specifically due to ticket and hospitality losses and other stadium revenues. The league postponed the regular season in March with only two weeks’ worth of games played. Gameday revenues for the league fell 95% this year compared to 2019.
“And that’s a function of lost revenue that regardless of what we’re able to do, is going to be nearly impossible to generate at the levels that we need,” Garber told reporters on a video conference call.
MLS is the latest sports organization to deal with the financial impacts of the coronavirus. The National Basketball Association laid off 100 employees in June, following the National Football League furloughing employees and reducing salaries in April.
MLS avoided layoffs until now, though local teams did make cuts starting as early as April. League officials agreed to take salary cuts in April, and players accepted a 7.5% pay cut in their new collective bargaining agreement. Tiered pay reductions are still in effect, but entry-level employees are excluded.
Source: MLS reduces full-time workforce by 20% – ESPN – 11/20/2020
MLS reduced its full-time workforce by 20% on Thursday, the latest sign of the coronavirus pandemic’s impact on the sports industry, a source with knowledge of the situation confirmed to ESPN. […] The workforce reduction included current staff as well as vacancies, and amounted to just under 70 people, a source confirmed. About 300 people were employed at the league’s headquarters prior to the layoffs.
MLS layoffs affect about 20 percent of league staff – Soccer America – 11/19/2020
Unlike teams in other U.S. sports leagues (NFL, NBA, MLB and NHL) or Europe’s big five soccer leagues that have big lucrative deals, MLS teams rely much more heavily on game-day revenues, including season-ticket sales and sales of individual tickets in advance or on game-days. The construction boom of MLS stadiums was driven by the desire to control in-stadium revenues such as VIP packages, concessions, food and beverage and parking. There are also club and league-wide sponsorship activations that depend on fans at stadiums.
Report: Major League Soccer lays off 20% of workforce due to pandemic – The Score – 11/20/2020
MLS commissioner Don Garber previously anticipated $1 billion in losses because of the health crisis. In an effort to combat the financial effects of the pandemic, league officials, including Garber, agreed to slash their wages, while players reportedly accepted a 7.5% pay cut as part of the new collective bargaining agreement. […] The regular season resumed in August with games played in local markets. Though the league was able to satisfy some of its broadcasting commitments, it ultimately lost significant sums in regular matchday revenue, as the majority of games took place behind closed doors.